THE CREDIT-NEWS

Multidimensional Perspectives on Business Information in Vietnam

CPTPP OFFICIALLY TAKES EFFECT IN VIETNAM

Monday, January 14, 2019 8:16:39 AM

Today, 14 January, the Comprehensive and Trans-Pacific Partnership (CPTPP) Agreement is officially in force for Vietnam. This is a new free trade agreement (FTA), consisting of 11 member countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The textile and garment industry, leather and footwear, aquatic products ...are being evaluated to have great advantages when CPTPP is effective, but it is still difficult to take advantage of incentives.

Today, 14 January, the Comprehensive and Trans-Pacific Partnership (CPTPP) Agreement is officially in force for Vietnam. This is a new free trade agreement (FTA), consisting of 11 member countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Expect new markets

From now on, if exporting goods to six countries that have ratified CPTPP is Mexico, Japan, Singapore, New Zealand, Canada and Australia, Vietnamese enterprises (DN) can make their own declaration of product origin (C/O) to enjoy tax incentives. On average, the tax rate is reduced by more than 60% as soon as CPTPP becomes effective and increases to 80% after 3 years.

Mr. Truong Dinh Hoe, Secretary General of Vietnam Association of Seafood Exporters and Producers (VASEP), evaluated CPTPP as an opportunity for seafood enterprises to expand export markets, especially new markets in this sector. Particularly for tuna, Vietnam has an absolute advantage in CPTPP because its two biggest rivals, Thailand and China, are not members of this agreement.

According to Mr. Pham Xuan Hong, Chairman of Ho Chi Minh City Textile and Embroidery Association, CPTPP does not bring strong growth for the textile industry but "there is more than nothing". The most expected market is Canada and Australia. Japan has had a bilateral agreement with Vietnam before, so it does not expect much growth.

However, the sectors assessed as having the top advantage when CPTPP is in effect are most worried about the origin. Mr. Pham Xuan Hong said that although he has prepared for CPTPP, to be able to "join" and take advantage of the advantages, enterprises have not met. "Enterprises have tried to limit imported materials but still have to import over 60% of foreign raw materials, of which 50% from China" - Mr. Hong pointed out.

According to Mr. Truong Dinh Hoe, CPTPP not only mentioned traditional issues such as tariff reduction, market opening ... but also set high requirements and standards on transparency and protection of intellectual property, dispute settlement mechanism. Therefore, seafood enterprises must determine food safety and hygiene as the first criterion, followed by product quality and competitive prices.

"Opening big markets will lead to agricultural growth, but technical barriers will be tightened. Farmers need to invest in a closed process, food safety, environment, and social responsibility." - General Secretary VASEP commented.

Many businesses are below the start

The problem of confusing Vietnamese enterprises at the threshold of this modern FTA is the weak internal strength. The report of the Ministry of Industry and Trade shows that over 86% of enterprises know about CPTPP but still do not know how this agreement will affect production and business. Many businesses are not really ready for international integration even though we have dozens of FTAs in progress.

Ms. Nguyen Thu Trang, Director of WTO Center and Integration - Vietnam Chamber of Commerce and Industry (VCCI), cited an average of 30% -35 of preferential tariff rates from FTAs of Vietnamese enterprises. % The reason is that enterprises do not know about these tariff opportunities, do not understand the conditions of rules of origin so that goods enjoy preferential tax and do not know how to comply with complicated procedures.

Mr. Vu Tien Loc, Chairman of VCCI, also expressed concern that the ranking of the business environment published by the World Bank showed that Vietnam ranked 69th in the world and ranked last in 11 economies. join CPTPP.

"The gap with the world is still too great, the competition will be very harsh. The number of enterprises that have stopped operating or dissolved is increasing in recent times, which clearly shows this. jobs for workers, promoting economic growth and improving people's lives, opportunities for multi lateralizing international economic relations, leaving our economy out of dependence. big in some markets but all is just an opportunity and may not become a reality "- VCCI Chairman is afraid.

According to Mr. Loc, we have learned from implementing 10 existing FTAs. The FTA once promised to bring many opportunities but the real benefits were modest. In less than 40% of the benefits of Vietnamese tariffs from FTAs, most of them belong to foreign-invested enterprises.

Mr. Luong Hoang Thai, Director of Multilateral Trade Policy Department - Ministry of Industry and Trade, said that it is necessary to pay attention to some agricultural products that some CPTPP countries have advantages while Vietnam has weak competitiveness like pork, chicken. Some industrial products that CPTPP countries have strengths can also cause difficulties for our production, such as paper, steel, cars.

"The Government has issued 3 decrees in the direction of restructuring the agricultural sector, reorganizing production and promoting the application of science and technology ... Many large corporations of Vietnam have paid attention to invest in the field. In the agricultural sector with advanced production and management technologies in the world, with other products, the main solution is to extend the tax reduction roadmap to have time to restructure domestic production. It is necessary to avoid dependence on the roadmap leading to slow innovation, passivity, and embarrassment when challenging "- leaders of Multilateral Trade Policy Department noted.

Source: CafeF

OLD POST

RECENT POST

6 STEPS FOR BETTER COMMUNICATION ON SOCIAL NETWORKS

These six steps can help businesses easily integrate social media into their business strategies.

New financial year resolutions for SME owners

Fiscal year 2018 in Vietnam is about to pass, how has your business performed this year? It is glad that you are spending time reading this article, w ...

[INFORGRAPHIC] 5G TECHNOLOGY: ENORMOUS POTENTIAL

In the future, 5G technology development can absolutely draw a new world, with “5G economy” being forecast for 2035 when the technology gets involved ...

Artificial Intelligence, Hype and Financial Misconduct

The compliance world, like business in general, is being inundated with “trends” and claims of “new technology” that inevitably (is or) will transform ...

[INFORGRAPHIC] VIETNAM ECONOMY IN THE FIRST 10 MONTHS OF 2018

In the first 10 months of 2018, there is an increase in Growth rate of key indicators in the first 10 months compared to same period last year. Ind ...